What You Need To Know This Week — January 23rd, 2021
What You Need To Know This Week
A weekly recap to keep you informed on the most important events this week impacting markets, business, tech and the global economy.
“CABLE COWBOY” JOHN MALONE DEBUTS LIBERTY’S $500 MILLION SPAC
Legendary operator and investor John Malone, along with his right-hand man Greg Maffei, raised $500 million through a special purpose acquisition company IPO. The SPAC, Liberty Media Acquisition Corporation, is looking for a target in the media, music, entertainment, communications and technology industries. The SPAC rallied as much as 33.8% on its first day of trading, signaling there is still froth in the blank check market. Undoubtedly, the reputational heft of two of the business world’s most successful operators legitimizes the SPAC asset class.
BATTLEGROUND STOCK: RETAIL SPECULATORS CREATE MASSIVE SHORT SQUEEZE IN GAMESTOP SHARES
Short sellers got their faces ripped-off as retail investors piled into GameStop shares, causing the stock to rally as much as 78% on Friday. The video game retailer’s stock, which was previously left for dead, has rallied over 1,000% over the past year. Speculators in internet chat rooms seem to be colluding on heavily shorted companies to try to manufacture a short squeeze, and GameStop shares have attracted a horde of traders attempting to manipulate the stock higher. GameStop has turned into a battleground stock with short sellers such as Citron Research’s Andrew Left calling for the shares to crash. Nonetheless, it has turned into a trading frenzy, with nearly $12 billion of GameStop shares trading on Friday, roughly triple the company’s entire float.
EV CHARGING COMPANY EVGO UNVEILS GOING-PUBLIC TRANSACTION THROUGH BLANK CHECK COMPANY
Blank check company Climate Change Crisis Real Impact I, which had a mandate to conduct a business combination in a climate-related sector, announced a deal with EVgo, an operator of DC fast charging stations for electric vehicles in the U.S. The going-public transaction features a $400 million private placement anchored by institutional investors, including PIMCO, BlackRock, Wellington Management, Neuberger Berman and Van Eck. The transaction values EVgo at an implied equity value of $2.6 billion. Once the deal closes, which is expected in the second quarter of this year, EVgo’s stock will trade under the symbol EVGO. The SPAC’s stock was up 64.5% on the news.
Notable Insights, Articles, Podcasts, and Tweets
In episode #114 of The Market Huddle podcast, Patrick Ceresna and Kevin Muir welcome Julian Klymochko to the show to discuss about the state of arbitrage and what the heck is going with these SPACS.
MicroStrategy bought the dip in bitcoin, adding $10 million of the cryptocurrency to its reserves at an average price of $31,808.
Globe and Mail: “ETF provider Accelerate Financial Technologies Ltd. plans to launch its OneChoice Alternative Model Portfolio ETF (TSX: ONEC) on Jan. 27. Its holdings will include different strategies, ranging from private credit to alternative currencies that include a 10-per-cent allocation to bitcoin.”
Bloomberg: “The Accelerate Arbitrage Fund ETF, which trades on the Toronto Stock Exchange, has returned about 43% since its April 7 launch compared to an almost 11% gain for the S&P Merger Arbitrage Total Return Index over the same period.”
Investment Executive: “As equity market valuations sit near record highs and fixed-income yields remain near all-time lows, investors are searching for uncorrelated returns to diversify their portfolios beyond the traditional portfolio of stocks and bonds.”
In a recent poll, 63% of investment advisors said an ETF was the preferred vehicle to invest in Bitcoin, compared with 16% for directly owning the digital coin and 10% for a mutual fund.
Don’t miss the upcoming webinar, Alternative Investments: The Ultimate Portfolio Diversifier, on Wednesday, January 27th at 2:00pm EST. Interested investors can register here.
Investing giant BlackRock filed a change to its BlackRock Global Allocation Fund such that it could add bitcoin futures to its $26 billion investment portfolio.
Legendary hedge fund manager Seth Klarman claims that the Federal Reserve has broken the stock market because central bank policies and government stimulus have convinced investors that risk “has simply vanished”.
Some institutional investors view commercial real estate as “safe”, however, one of Canada’s largest cities has a 29.5% downtown office vacancy rate. Billions of dollars of assets now have deeply negative carry and substantial write-downs.
The Swiss exchange now lists 34 crypto exchange traded products from six issuers. North America remains light years behind Europe concerning crypto exchange traded products.
